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What the 2020 Federal Budget means for you

October 16, 2020 By raadmin

To kickstart the economy after Australia’s massive COVID-19 outbreak, the Federal Government has released a huge spending and tax cuts Budget for 2020.

Here is our summary of the 2020 Federal Budget and what it means for you.

This appears to be a great Budget for the young, anyone still working and business owners.
The massive Government spending, tax cuts and wages subsidies will lead to higher spending throughout the economy and ideally greater business investment.
This pushes up confidence and job creation so hopefully more economic growth.

There are a few key areas we would like to make you aware of.

I, Business Owners

Tax Loss “Carry Back”

If your business is making losses now because of the COVID-19 recession, you can get a tax refund out of the taxes you have paid on profits going back to the 2019 year. And you can use the “carry back loss” trick for the 2021 and 2022 financial years.

Specifically, a company can carry back losses from the 2020, 2021 and 2022 financial years to offset previously taxed profits in the 2019, 2020 and 2021 financial years.

However, this only applies to companies. Sole traders, partnerships and trusts won’t be able to access this benefit.

This tax refund will be available as a choice to be made when a company lodges its 2021 and 2022 Tax Returns.

Immediate Asset Write Off

The Government wants businesses to spend big. This measure allows businesses with a turnover of less than $5 billion to claim a full up-front tax deduction for the cost of new business assets. There is no cost cap with this measure – it is not limited like the previous $150,000 instant asset write off that is in place until 31 December 2020.

This applies to the purchase of capital assets from 6 October 2020 and first used or installed by 30 June 2022.

This means that if you buy a new truck for $250,000, then you get a 100% tax deduction in year one.

*Important: Remember, this does NOT mean that you get $250,000 in tax back. You effectively save tax at your marginal tax rate. So, a company with a 27.5% tax rate will save $68,750 in tax if they buy a $250,000 truck.

For businesses with a turnover under $50 million, this also applies to secondhand assets.

Small Business Pooling – Immediate Write Off

Small business entities that have a turnover of less than $10 million using the simplified depreciation rules can claim as an expense the balance of their simplified depreciation pool at the end of the 2021 year.

This is great because it gives business owners a tax deduction for the full amount of non-depreciated assets they have purchased in prior years.

JobMaker Hiring Credit

The JobMaker hiring credit will be available to eligible employers over 12 months from 7 October 2020 for each additional new job they create for an eligible employee.

Employers will receive $200 a week for hiring someone aged 16 to 29 and $100 a week for taking on someone aged 30 to 35.

The JobMaker hiring credit will be paid quarterly in arrears and will be available for 12 months from the date of employment with a maximum amount of $10,400 per additional new position created.

To be eligible, the employee will need to have worked for a minimum of 20 hours per week averaged over a quarter, and have received the JobSeeker Payment, Youth Allowance or Parenting Payment for at least one month out of the three months prior to when they are employed.

Employers will need to prove that the new employee will increase overall employee headcount and payroll.

Boosting Apprenticeship Commencements

A business that takes on a new or recommencing Australian apprentice will be eligible for a 50% wage subsidy. The subsidy is paid in arrears and is available for wages paid from 5 October 2020 to 30 September 2020, up to a maximum amount of $7,000 per quarter.

FBT Changes

A few FBT changes have been announced, including removal of FBT on car parking and portable electronic devices from 1 April 2021, and on retraining and reskilling costs for employees from 2 October 2020.

R&D Tax Incentive Changes

The Government has backflipped on previously proposed cuts to research and development tax incentives.

For small companies (turnover less than $20 million) the refundable R&D tax offset will be set at 18.5% above the company tax rate and there won’t be any cap on annual cash refunds.

The R&D laws are quite complex, so please feel free to contact us for further information if R&D is something that your business would like to claim.

II, Individuals

Personal Tax Cuts

To kick start the economy, the Government is introducing tax cuts totaling $50 billion backdated to 1 July 2020.

There are 2 key parts to it. An offset which will get paid in a lump sum after July next year when you lodge your 2021 Tax Return, and an immediate reduction in the tax taken from your wages as soon as this legislation passes Parliament.

In both cases there is nothing you need to do and no extra forms to fill out at tax time – the adjustments will happen automatically.

Here’s what tax cuts you’ll get:

The average teacher’s wage is around $90,000, so a couple who both teach can expect a tax cut of up to $3,060. That’s massive! The big question is if people will spend these tax cuts or reduce their home mortgages and save them.

$250 Economic Support Payments

A payment of $250 in December 2020 and another payment of $250 in March 2021 will be made to individuals receiving Age or other pensions and health care card holders. These payments will be exempt from tax and will not count as income support for any income support payments.

Superannuation – “Stapling” of Accounts

This is something that really makes sense. Under this measure, an individual’s super account will be “stapled” to them as they change jobs. New super accounts will no longer be automatically created every time someone starts a new job.

Capital Gains Tax removed from “Granny Flats”

Currently, there is a risk of capital gains tax (CGT) applying if you sell your family home and if you have entered a formal granny flat arrangement with an elderly parent or relative. The Budget has now included a measure where CGT will not apply to this.

NEXT STEPS: If you have any questions about how the 2020 Federal Budget affects you – please contact us and one of our expert accountants will help you!

How to improve wellbeing in the workplace

September 18, 2020 By raadmin

Let’s face it, most people spend the majority of their waking time at work. Stress, long hours of staring at the screen, tough targets, and a poor work-life balance can have a huge effect on people’s physical and mental health. Thus, it’s crucial for companies to take staff wellbeing seriously. Furthermore, research has shown that happy and healthy employees improve overall team productivity. So how can businesses promote wellbeing in the workplace effectively?

Here are some ideas for you to get started:

1, Create a productive environment

Design an area with seating and tables where staff can gather and collaborate with each other is a good idea. You should also install some good lighting, colors, and plants to prevent fatigue and make the office more inspiring.

2, Encourage staff to exercise

You can encourage staff to walk or bike to work. Encouraging them to take walks around the building during breaks is also a good idea. Another way to motivate employees to exercise is to give them discounts to a local gym. This will also let people socialize outside of work as well.

3, Provide healthy office snacks

Instead of having soft drinks and sugar-loaded snacks in the office fridge and pantry, you can offer baskets of fresh fruit and healthy snacks. This will encourage employees to eat healthier and improve their productivity.

4, Share healthy meals photos, and recipes

You can share healthy meal photos and recipe ideas to your team through the company group chat or emails to encourage staff to eat healthily. This will also build team spirit and give them inspirations to diversify their meals.

5, Encourage communication

The communication of wellbeing needs at work is important but often overlooked. Many people feel uncomfortable about talking about how they feel about work and ashamed to show that they need support.

Communication is the key to receiving help and solving the problem. Employers are responsible for supporting staff wellbeing, but they need to know the situation to do it. Therefore, if you encourage these conversations (e.g. offer one-to-one sessions), you can be more aware of what employees go through and how to improve it. This will also improve openness in the workplace and cultivate a company culture of acceptance.

NEXT STEPS:

If you need help, don’t hesitate to contact us! Give us a call or book a consultation on 07 3367 0852.

You can also check out some of our articles:

Taxi travel exemption now includes travel in ride-sourcing vehicles

Opportunities are opening up during Coronavirus crisis

August 9, 2020 By raadmin

While many Australians are losing their jobs due to the coronavirus outbreak, some businesses and industries are looking for new workers. Although hospitality and retail industries are facing a huge risk of collapse because of social distancing policies to stop the virus from spreading, many jobs are being created.

For example, North Queensland’s resources sector is creating many jobs because companies are expanding during the pandemic. Sun Metals in Townsville is expecting to create 350 construction jobs by about October, and 100 ongoing positions as construction finishes in the second quarter of 2021. Ravenswood Gold started hiring contractors and 150 permanent employees it needs by mid-2021 because it is looking to extend the mine’s life with a large-scale open pit at Ravenswood, south-west of Townsville. Similarly, in Central Queensland, BHP has recently put on over 100 apprentices in Mackay and Pembroke has received conditional approval to build a new coking-coal mine in the Bowen Basin, which promises to create new jobs soon.

The central Queensland town of Emerald has a shortage of important migrant workers because of COVID-19 travel restrictions. The return workers who would have arrived in April could not come back, so 2PH Farms in Emerald, one of the largest privately-owned mandarin orchards in the Southern Hemisphere, hired 100 people from within Australia to fill the essential jobs.

Health care and social assistance could be some of the most stable job sectors ahead. Researchers believe healthcare and social assistance are sectors likely to remain stable after coronavirus. The reason why jobs are stable in this field is that the government provides funding and support to keep these jobs going. Furthermore, data from the federal government shows that health care and social assistance were predicted to grow by 250,000 jobs by 2023. With an aging population and a reduced number of the migrant workforce due to the coronavirus outbreak, new jobs are very likely to be created in this field.

The pandemic could be an opportunity for rural economies to develop, as regional areas generally have problems attracting skilled labor and as a result, employ backpackers or migrant workers. But these sources of labor are not widely available at the moment due to travel restrictions, so some opportunities are opening in regional areas and are attracting people from other parts of Australia. The new ways for people to work remotely from the CBD office towers may also enable a population shift to the regions.

We also expect to see small business opportunities pop up as the whole economy undergoes massive change. Be on the lookout for new ways of working, new products/services or other opportunities that could maybe just turn the pandemic into an opportunity for you and your business to prosper and grow.

Helping you and your business reach your goals and provide you the lifestyle you desire is what we do. So make sure you talk to us when you do find that great opportunity.

Xero Document Packs are here for easy, quick and secure e-signing

July 31, 2020 By raadmin

Xero Document Packs is an electronic signing application using Adobe Sign for all documents that need to be signed. With this great tool, you can sign documents online without the hassle of printing, signing, and sending. Our team at RA Business Advisors uses Xero Document Packs and we think that it is super easy and quick to use this tool. Read on to know more!

We combine tax returns from Xero Tax, reports from our clients’ Xero organization, and PDFs that we upload. Then we add any extra signature lines, upload the document pack to a secure online portal and invite clients to log in and sign using Xero Sign powered by Adobe Sign.

Why is it useful?

1, Improve efficiency

You can just log in and sign with Xero Sign powered by Adobe Sign. No need to print, sign, send and file documents.

2, Safe and secure

Documents that need to be signed are stored in a secure Xero portal. Adobe Sign securely stores the signed tax return and the e-sign audit trail. You can also access a copy from Xero Tax anytime. Did we mention that Adobe Sign is the best-in-class provider, with over 40 million users of e-sign services?

3, Track who’s signing

All signing events are tracked and IP addresses are recorded in a detailed audit log. Xero also verifies who’s signing with their email ID.

4, Nothing new to install

E-sign works seamlessly within Xero Tax, so there’s nothing to install and our clients can access it from anywhere.

Sounds good, so how do I sign and authorise a document?

A, To authorise an e-signature request you’ve been sent:

1, Click Review Documents from the email.

2, Log into the Xero Portal:

If you’re an existing Xero user, trialist, or have used the Xero Portal before, log in using your existing email address and password.
If you’re not a Xero user, you’ll need to enter a password and your phone number, indicate you accept the terms of use and click Activate your account.

3, Click Review to open each document you’ve been asked to sign. If you have more than one document to sign, you’ll see a list.

4, After you have confirmed all document details are correct, click Start.

5, Click in the Click here to sign field to open the declaration options. You can type or draw your signature, or use an image or your mobile to sign. Click Apply to confirm the signature. The date field will pre-populate with today’s date.

6, If your signature is required in multiple locations, click Next to jump to the next declaration.

7, When all declarations have been completed, click Click to Sign to complete the e-sign process.

Or check out this page for a step-by-step video.

B, To view the audit report of the e-signed document:

You can download your signed document at any time from the Xero Portal, using the link in the request email. This will show you the audit trail of the signed document. The report is a full audit history including the IP address of the signer, dates and times of each action.

1, Log in to the Xero Portal using the link from the request email or by logging in to https://portal.xero.com/

2, Click Download for the signed document you want to view.

3, Open the PDF and go to the declaration or to where your signature is.

4, Click on the link under your signature, to open the audit report for that return.

5, Click View Audit Report. You can also type in the transaction number for another report.

C, Decline a request to e-sign a tax return

1, Click Review Documents from the email.

2, Log into the Xero Portal:

If you’re an existing Xero user, trialist or have used the Xero Portal before, log in using your existing email address and password.
If you’re not a Xero user, you’ll need to enter a password and your phone number, indicate you accept the terms of use, and click Activate your account.

3, Click Review to open each document you’ve been asked to sign. If you have more than one document to sign, you’ll see a list.

4, From the return, click Options, then select I will not e-sign.

5, Enter the reason for declining.

6, Click Decline.

A decline notice will be sent to your advisor.

How secure is it?

Adobe Sign e-sign services comply with industry-accepted standards and certifications. Adobe Sign stores all customer data in geographically dispersed data centers with state-of-the-art environmental and data security measures. Read more about Adobe Sign security.

NEXT STEPS:

If you need help, don’t hesitate to contact us! Give us a call or book a consultation on 07 3367 0852.

You can also check out some of our latest articles:

Tax myths to avoid during this current Tax Time

Withdrawing super early and recontributing your super can result in consequences

Tax myths to avoid during this current Tax Time

Taxi travel exemption now includes travel in ride-sourcing vehicles

July 17, 2020 By raadmin

The ATO confirmed that ride-sourcing is now considered ‘taxi travel’ for fringe benefits tax (FBT) purposes. This change is because of amendments to the Fringe Benefits Tax Assessment Act 1986, which are now law. Travel by Uber and other ride-sourcing services now qualifies for fringe benefits tax (FBT) exemptions on the same footing as traditional taxis.

Employers are now eligible for the exemption for travel provided to their employees in a single trip to or from the employee’s workplace:

on or after 1 April 2019
in a licensed taxi or other vehicle involving the transport of passengers for a fare – other than a limousine – such as a ride-sourcing vehicle.

Employees can also be eligible for the FBT taxi travel exemption on or after 1 April 2019 if it’s as the result of sickness of, or injury to, the employee, and whole or part of the journey is directly between:

the employee’s place of work
the employee’s place of residence
any other place that it is necessary, or appropriate, for the employee to go as a result of the sickness or injury.

“The change is designed to help minimize compliance costs for businesses providing transport for their employees.”, said ATO Deputy Commissioner John Ford. Any benefit from travel by an employee using a registered taxi or ride-sourcing provider (other than in a limousine) is now exempt from FBT subject to meeting certain criteria.

For more information on the FBT taxi travel exemption, go to ato.gov.au/FBTtaxi.

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Withdrawing super early and recontributing your super can result in consequences

New residential construction stimulus package

Tax myths to avoid during this current Tax Time

July 3, 2020 By raadmin

2020 has been difficult, but your tax return doesn’t need to be. “There is always a range of myths that need busting around Tax Time and the changed circumstances this year have seen some new additions to the list,” Assistant Commissioner Karen Foat says.

Check out this list of 2020’s top tax myths to avoid!

1, Bank details need to be updated

According to the ATO, last year many people in their rush to lodge early forgot to update bank details and delayed their refund. While the ATO receives information from banks, this doesn’t extend to updating details for the bank account you nominate to have your refund deposited into.

2, You can’t “double dip”

The ATO is concerned that some taxpayers may “double dip” by claiming their working from home expenses using the all-inclusive shortcut method while claiming for specific items such as laptops or desks. If you are claiming under the shortcut method, you cannot claim a separate additional deduction for any expenses you incur as a result of working from home.

3, You can’t claim home to work travel

According to the ATO, if you are working from home as a result of COVID-19, but sometimes need to travel to your regular office, you cannot claim the cost of travel from home to work as these are still private expenses. Although you are working from home, your home is still a private residence – it is not a ‘place of business’. Generally, you can only claim the cost of traveling from home to work if you are required by your employer to transport bulky tools or equipment and there is not a safe place to store these at your workplace.

4, You can’t claim $300 if you had no expenses

Ms. Foat stated that the ATO often sees people claiming a deduction although they did not purchase anything, and this is often because they thought everyone is entitled to claim $300. While people don’t need receipts for claims of expenses up to $300, they must have spent the money and can show the ATO how they worked out their claim.

5, Work-related expenses must be work-related!

The ATO finds taxpayers trying to claim personal expenses under the guise of work-related expenses, but the truth is, you can only claim for expenses that are directly related to earning your income.

For example, if you are working in jobs that require physical contact or close proximity to customers and you had to buy your hand sanitizer, gloves, or masks to use at work, you can claim these items. On the other hand, if you are not in jobs that aren’t close to the public or if you have purchased these items for their general use, you cannot claim these items.

Furthermore, you cannot claim for the costs of setting your children up for homeschooling, as the ATO views these costs aa being private expenses.

6, Lodging early not necessarily means an early refund

For this year, the COVID-19 element is likely to mean third-party information from employers, banks, private health insurers (and this year JobKeeper for employees and JobSeeker amounts) may not be fully available until later in July or mid-August. For most people, this information is ready by the end of July.

Therefore, you should lodge when the ATO has automatically included this information for you. Lodging earlier can leave out some important information, which can slow your return down as a result.

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Withdrawing super early and recontributing your super can result in consequences

New residential construction stimulus package

Withdrawing super early and recontributing your super can result in consequences

June 26, 2020 By raadmin

Thanks to the ATO’s COVID-19 early release of super, those who have been financially affected maybe able to access some of their super early. However, since there is no restriction on how this money can be spent, eligible individuals can use this money for anything they choose or save it for future expenses. They can also recontribute some amounts back into their superannuation if they meet the contributions rules (both eligibility and acceptance) and, in the case of SMSFs, their trust deed allows it.

This recontribution strategy involves withdrawing a lump sum and recontributing these funds into super as a non-concessional or concessional contribution, in which the individual can claim a tax deduction for the contributed amount. Although recontribution strategies are acceptable, it is important to understand that the new early release scheme is aimed to help those who are affected by COVID-19, not to help individuals obtain tax benefits. The ATO is now concerned that these actions have become prevalent and has issued a warning: “COVID-19 Early release of super – integrity and compliance”.

The ATO highlighted the following aspects of the tax law related to superannuation that can happen if individuals use the mentioned recontribution strategy:

Excess contributions tax; individuals may need to pay additional tax if they exceed the concessional or non-concessional contributions cap
Contributions tax; concessional contributions made to a super fund are taxed at the 15% rate by the fund
affecting eligibility for a super co-contribution
Division 293 tax; individuals may need to pay additional tax due to income and personal super contributions.

Furthermore, if individuals enter the COVID-19 early super scheme mainly for the purpose of obtaining a tax benefit, the application of Part IVA can happen. The ATO says schemes under COVID-19 early release of super that attract its attention include:

artificially arranging affairs to meet the eligibility criteria
withdrawing and recontributing super to claim a tax deduction
contributing an amount of super to claim a deduction and then withdrawing that amount.

Where Part IVA applies to a scheme, the tax benefit obtained may be cancelled. Administrative penalties and interest charges can also apply.

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Tips to create a work from home schedule that works for you

Top tips to increase your customers in 2020

Tips to advertise your small business for free

June 19, 2020 By raadmin

Promoting your business online is important to your business’ growth in 2020. It helps to reach your potential customers, raise consumer awareness about your product/service and increase sales. But before spending the big bucks on marketing and advertising, have you considered the advertising options that are absolutely free and still powerful? Read on to learn more!

1.List your business on search engines and online directories

Registering your business with Google My Business helps people find your business easily on Google and Google Maps as well. This helps optimize your local marketing strategies without spending money! Simply fill out the registration form and get your business verified through the confirmation process. You can also look at online directories that list businesses in your industry and register for a listing as well.

For example, we have a Google listing where potential customers can easily click on the maps to get directions, call us or view our website:

2.Get involved on social media

Using social media is a good way to connect with your customers. Keep in mind that the goal of using social media marketing is not to shove your product/service in their face, but to create and maintain meaningful relationships. To do this, you should post relevant content related to your business/product or brand by telling stories that engage with customers. You should also interact actively with them (e.g. by replying fast, posting polls, etc.).

3.Get involved with the community

You can get on the local community’s good side by getting involved, e.g. raising awareness of a problem, donating to charity. It’s possible that customers will support your business because you stand for something that they are interested in and you make a difference in the community.

4.Host a free workshop

Hosting a free workshop that gives out advice (related to your industry) can deliver promising results. Doing this shows that you are a leader and an expert in your field and builds awareness about your business as well. At the end of the workshop, you should call to action by encouraging attendants to try your service/product and giving out contact information. The next time when someone needs the product/service you offer, they will turn to you or your company for a solution.

5. Encourage customers to leave online reviews

Many people read online reviews before purchasing from a local business, especially on Google, and they are more likely to trust your product/service if they see a good rating from past customers. Make sure that you ask your happy customers to leave you an online review!

For example, customers gave us reviews on our Google listing:

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Tips to create a work from home schedule that works for you

Top tips to increase your customers in 2020

New residential construction stimulus package

June 5, 2020 By raadmin

Treasury has announced a new time-limited grant program HomeBuilder to help the residential construction market to bounce back from the Coronavirus crisis. The grant scheme provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home.

To access HomeBuilder, owner-occupiers must meet the following eligibility criteria:

you are a natural person (not a company or trust);
you are aged 18 years or older;
you are an Australian citizen;
you meet one of the following two income caps:

- $125,000 per annum for an individual applicant based on your 2018-19 tax return or later; or
- $200,000 per annum for a couple based on both 2018-19 tax returns or later;

you enter into a building contract between 4 June 2020 and 31 December 2020 to either:

- build a new home as a principal place of residence, where the property value does not exceed $750,000 including the land; or
- substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your property prior to renovating is less than $1.5 million;

construction must commence within three months of the contract date.

Some important notes:

Owner-builders and those seeking to build a new home or renovate an existing home as an investment property are ineligible for HomeBuilder.

Additionally, renovation works must be to improve the accessibility, safety, and livability of the dwelling. It cannot be for additions to the property such as swimming pools, tennis courts, outdoor spas and saunas, sheds.

In negotiating a building contract, the parties must deal with each other at arm’s length. This means the contract must be made by two parties freely and independently of each other, and without some special relationship, such as being a relative.

The terms of the contract must be commercially feasible, and the contract price not inflated compared to the fair market price. Renovations or building work must be undertaken by a registered or licensed building service “contractor” (under relevant state or territory laws) and named as the builder on the building license or permit.

For more information, check out the Treasury website.

Don’t forget to share this post! Or check out some of our latest articles:

Tips to create a work from home schedule that works for you

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